RTKL; Application of Predecisional Deliberative Exception to Agency Subcontractors; Application of Mootness Doctrine to Records Produced During Appeal

Finnerty v. Pa. Dep’t of Cmty. & Econ. Dev., 208 A.3d 178 (Pa. Cmwlth. 2019); 2019 WL 1858392 (Pa. Cmwlth. Apr. 25, 2019) (unreported), allocatur granted Dec. 27, 2019 sub. nom. Chester Water Auth. v. Pa. Dep’t of Cmty. & Econ. Dev., appeal dockets 44 & 45 EAP 2019

The Pennsylvania Supreme Court granted allocatur in this matter of first impression involving the application of the Pennsylvania Right to Know Law’s internal, predecisional deliberative exception to information shared with agency subcontractors without a direct contractual relationship with the agency. The court will also consider Commonwealth Court’s application of the mootness doctrine to records produced during the pendency of the appeal.

These related cases, Finnerty v. Pa. Dep’t of Cmty. & Econ. Dev., 208 A.3d 178 (Pa. Cmwlth. 2019) (“Finnerty I”); 2019 WL 1858392 (Pa. Cmwlth. Apr. 25, 2019) (unreported) (“Finnerty II”), arose from RTKL requests submitted by Nolan Finnerty to the Department of Community and Economic Development (Department) seeking, inter alia, various records relating to the potential monetization or privatization of the Chester County Water Authority (CWA). The court summarized the relevant factual background as follows:

Since 1996, pursuant to the Municipalities Financial Recovery Act2 (Act 47), the City has been determined to be a financially distressed municipality. Under Section 221 of Act 47, 53 P.S. § 11701.221, the Department is authorized to appoint and compensate a consultant who will act as a coordinator in preparing and addressing the municipality’s financial problems. In February 2016, following a request for proposals (RFP), the Department entered into a contract (Contract) with EConsult Solutions Inc. (EConsult) to act as the Act 47 Coordinator for the City. (Reproduced Record (R.R.) at 111a-41a.) At the time of the Contract, EConsult had been serving as the Act 47 Coordinator for the City since September 2015 2 Act of July 10, 1987, P.L. 246, as amended, 53 P.S. §§ 11701.101-11701.712. 3 under a contract with the Department. (Id. at 338a.) Under the terms of the RFP, which were incorporated into the Contract, EConsult was responsible for implementing the Recovery Plan for the City, working closely with municipal officials, maintaining close contact with the Department and providing the Department with progress reports regarding the Recovery Plan implementation, consulting with employee collective bargaining groups, attending meetings as directed by the Department and requested by the City, consulting with state and federal agencies as necessary, and applying for grants as provided by Act 47. (Id. at 139a.) In Article XIII of the Contract, EConsult promised not to enter into any subcontract for the activities identified in the Contract without the prior written approval of the Department. (Id. at 130a.) Appended to the Contract was a budget, which allotted payment to Fairmount Capital Advisors (Fairmount), as a financial consultant, and McNees, Wallace and Nurick (McNees), as legal counsel, for subcontract work they were to perform related to EConsult’s activities as Act 47 Coordinator. (Id. at 144a, 154a.) The budget stated that Fairmount and McNees would bill hourly through EConsult. (Id.)

Finnerty I Slip Op. at 2-3; Finnerty II Slip Op. at 2-3.

In Finnerty I, the Commonwealth Court affirmed OOR’s final determination rejecting Finnerty’s appeal from the Department’s refusal to release portions of a report from EConsult to the Department (EConsult Report), and an attachment to an email dated November 22, 2017 (Email Attachment) from a McNees attorney to the Department’s staff and staff of EConsult and Fairmount. In Finnerty II, the Commonwealth Court considered whether OOR erred in rejecting Finnerty’s appeal from the Department’s refusal to provide associated emails exchanged among EConsult, McNees, and the Department. In its denials, the Department claimed the withheld records constituted internal, predecisional deliberations, consisting of “internal staff and contractor recommendations, comments to documents, draft proposals, and discussions that played a role in the Department’s Act 47 decision making process.” Finnerty I Slip Op. at 6; Finnerty II Slip Op. at 6.

Finnerty filed an appeal under the RTKL with OOR, arguing that the Department had not provided sufficient information to meet its burden of showing that the withheld records were exempt from disclosure when the records were shared externally outside of the agency. In response, the Department submitted an agency affirmation from Jennifer Fogarty, who stated that McNees was hired by EConsult to provide legal services under the Contract with the Department and that the Department and EConsult were the clients of McNees. Fogarty further confirmed that the Department paid McNees’ legal bills for the work it performed under McNees’ subcontract with EConsult.  Requester argued that the internal, predecisional deliberation exception did not apply to the withheld records because such records had to be internal to one agency or among other governmental agencies and that EConsult, McNees, and Fairmount could not be considered agencies for the purpose of this exception and that information shared externally had to be disclosed. In both cases, OOR agreed with the Requester that EConsult and its subcontractors were not “agencies” within the meaning of the RTKL, however determined that the requested records were internal to the Department because EConsult and its subcontractors shared a contractual relationship with the Department.

Finnerty appealed to Commonwealth Court, arguing:

…the RTKL “is silent as to contractors of a nonagency in a manner similar to the relationship between McNees and Fairmount . . . to E[C]onsult,” but that because exceptions under the RTKL should be interpreted narrowly, internal records should be limited to records shared within the agency or among several agencies. (Requester’s Brief (Br.) at 26.) Further, OOR’s own case law that considers records shared where there is a contractual relationship between the agency and a contractor is inapposite as McNees and Fairmount were EConsult’s contractors, not the Department’s. While the internal, predecisional deliberation exception has been extended to agents of the agency, “OOR did not and could not conclude that E[C]onsult, McNees and/or Fairmount . . . were agents of the Department.” (Id. at 28.) Rather, EConsult is an independent contractor of the Department, while McNees and Fairmount have some “unknown and unclear” relationship with EConsult. (Id.) As such, Requester asserts that OOR erred in insulating the withheld records from disclosure under the internal, predecisional deliberation exception.

Finnerty I Slip Op. at 11; Finnerty II Slip Op. at 11. In both cases, Commonwealth Court affirmed OOR’s decision based on the Department’s contractual relationship between it, EConsult, Fairmount, and McNees, explaining that “they are all bound by the Contract, which obliges them to assist the Department with the financial and legal aspects of the Recovery Plan” and “It would serve no compelling public interest and undermine the purpose of the internal, predecisional deliberation exception to require disclosure of records shared between an agency, a contractor, and an essential subcontractor.” Finnerty I Slip Op. at 11-12; Finnerty II Slip Op. at 11-12.

In both cases, Requester additionally challenged the Department’s withholding of certain email communications under the privilege of attorney-client communications and, relatedly, the attorney work-product doctrine. However, at oral argument, the Department’s counsel represented, and Finnerty’s counsel agreed, that the records withheld as privileged attorney-client communications and under the attorney work-product doctrine had been disclosed to Requester. Therefore, Commonwealth Court concluded that, “as a result of that disclosure, Requester’s challenges based on the attorney-client communications privilege and attorney work-product doctrine have been rendered moot, and none of the exceptions to the mootness doctrine apply.” Finnerty I Slip Op. at 2; Finnerty II Slip Op. at 2.

The Pennsylvania Supreme Court granted allocatur as to the following issues, as stated by Chester Water Authority:

(1) Whether the Commonwealth Court erred in extending the internal, predecisional deliberative exception under Section 708(b)(10)(i) of the Pennsylvania Right to Know Law to public information shared with agency subcontractors having no direct or proper contractual relationship with the agency?

(2) Whether the Commonwealth Court erred in mooting Petitioner’s objections to the assertion of the attorney client privilege and attorney work product as a result of an unsolicited eleventh-hour production, without consideration for the issue’s repetition and public importance as it relates to the production of public information under Pennsylvania’s Right-to-Know Law?

Allocatur grants present an excellent opportunity for your group or association to advance your legal and policy goals by filing an amicus brief. Participating as an amicus has proven to be an effective method of advising and influencing courts and often can involve far fewer resources than traditional lobbying.

If you are interested or would like more information, contact Kevin McKeon or Dennis Whitaker.